Families in Australia are paying more than $200 a month in bank fees/charges, according to research from the Australia Institute.
The Australia Institute analysis also found workers on $50,000 per year, less than the national average wage, were paying almost $120 per month in fees and charges to banks.
For families, the results were slightly better per person, however the Australia Institute analysis found that the household was paying on average $212.80 per month.
The Australian Bankers Association has disputed the numbers calculated by the Australia Institute research, arguing that the figures calculated did not represent the actual fees paid by individuals but were representative of indirect costs that were not passed on by businesses to families.
Australian Bankers Association chief Steven Munchenberg argued that many of the fees included in the Australia Institute analysis were absorbed by businesses and were not then passed on to consumers.
“We would absolutely dispute that,” Mr Munchenberg said.
Australia Institute senior research fellow David Richardson used the research conclusions to drive home a message that excessive bank fees and higher than necessary interest rates charged by banks were hurting consumers in the interest of profits for banks.
“high interest charges and other fees paid by business are being passed on to consumers through higher prices in everything from groceries, hairdressers and mechanics to DVD rentals and fast food,” Mr Richardson said.
“Even if you use a credit union or building society the big four banks get you when you use a foreign ATM, your credit union banks with one of the banks, your credit union outsources its cheque processing functions or your credit union arranges credit cards through the banks.” Mr Richardson said.
To calculate the fees paid by consumers the Australia Institute estimated bank profits at 3 percent of gross domestic product, then applied the 3 percent figure to an individual earning a wage of $50,000 per year gave a figure of $28.85 per week or $1500 per year paid to the banks.
For the Australia Institute’s figures to play out in reality businesses would have to pass on the full amount of fees paid to banks on to consumers, some would argue that this doesn’t happen and the final figure is lower however.